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Investor Sentiment: What Are Your Expectations?
Company insiders are selling in record numbers, once again. Yes, insiders have been selling for the better part of 8 months as share prices have risen, but how good could a company's prospects be if those at the controls don't see any benefit of holding onto their shares? The S&P500 has moved over 60% since the March, 2009 lows. The "bull market" hype has been nothing but a trading range for 4 months now, and over this time, the "dumb money" has been increasingly bullish while the "smart money" has shown indifference. If all this isn't enough to get you to realize the market's prospects are limited without a meaningful pullback, then maybe the actions of company insiders will. If insider expectations continue to remain low, then why should yours remain high?
The "Dumb Money" indicator, which is shown in figure 1, looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investor Intelligence; 2) Market Vane; 3) American Association of Individual Investors; and 4) the put call ratio. The "Dumb Money" indicator is neutral.
Figure 1. "Dumb Money" Indicator/ weekly
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The "Smart Money" indicator is shown in figure 2. The "smart money indicator is a composite of the following data: 1) public to specialist short ratio; 2) specialist short to total short ratio; 3) SP100 option traders. The Smart Money indicator is neutral to bearish.
Figure 2. "Smart Money" Indicator/ weekly
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Figure 3 is a weekly chart of the S&P500 with the InsiderScore "entire market" value in the lower panel. From the InsiderScore weekly report we get the following: 1) "Selling increased across all market cap groups and sectors last week, pushing the Market-Wide Weekly Score to its worst level since the week ended August 11, 2009"; 2) within the S&P500, the weekly score hit its worst level since June, 2007 with selling out pacing buying by a 7:1 ratio; 3) selling increased dramatically week over week in the Russell 2000; 4) selling and lack of buying conviction picked was noticeable within the Financial, Technology, Healthcare and Basic Material sectors.
Figure 3. InsiderScore Entire Market/ weekly
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Figure 4 is a weekly chart of the S&P500. The indicator in the lower panel measures all the assets in the Rydex bullish oriented equity funds divided by the sum of assets in the bullish oriented equity funds plus the assets in the bearish oriented equity funds. When the indicator is green, the value is low and there is fear in the market; this is where market bottoms are forged. When the indicator is red, there is complacency in the market. There are too many bulls and this is when market advances stall.
Currently, the indicator was headed towards a bullish signal (suggesting too many bears) but the dip buyers bought the dip early, and in all likelihood, they will be disappointed as it will take lower prices to bring about a more lasting bottom and tradeable rally.
Shorter term Rydex measures continue to suggest that these market timers are warming up to higher prices. This data, which has proved to be very actionable, is now available for a nominal yearly fee as Premium Content. This service should help you to improve your market timing!
Figure 4. Rydex Total Bull v. Total Bear/ weekly
The MAIN DIP BUYER is the fed and they turn the chart bullish so technical traders will unload shorts and go long? they produce those hammer candles because they are in over thier heads with all the crap on thier books? can they hold this market up long enough to unload some of this crud like the BAC WARRANTS and AIG SHARES? this is a question none of us can answer, nor can our charts.
LOOK AT THE FRIDAY CLOSE OF ... BAC $16.66
are the MMs Market Makers or Masters of Minions.
if the smart money is short, how long will they have to wait to be proven smart. maybe when the FED's balance sheet looks better and they are done throwing bad money after bad money at at this black hole.
note... im nuts... i bought some AIG PUTS on the blip up. my money says it goes wrong... horribly wrong. PRU cant buy the AIG UNIT bcs it proves to be a terrible mess and the board will not approve the debt required to buy trash.
Snow is the new sentiment. All bad news is because of snow. Even that p.o.s. Larry Summers was out today blaming any bad employment numbers on Friday as due to the snow and he suggested that bad numbers should be disregarded somewhat due to the weather.
Next stop...all bad employment numbers NEXT month will be blamed on Senator Bunning.....stay tuned.
Like any of this Smart money / Dumb money shit means anything. The markets will remain manipulated up at these absurd levels till the QE spigot runs out. Then the banks will run the risk of buying this shit with there own money... in which case the perma-bid underneath the market will be absent.
It's really different this time.
Traditional barometers are falling out like the schlong in a 50 year old prostitute.
Insiders, PEs, Momentums, etc. are about as useful today as
Ben Graham advice.
The new paradigm will guide the markets one based on what Goldman Sucks and the rest of the Shadow Elite want to happen. If you don't have that genuinely tradeable inside information then you are not part of "The Sting".
Might as well just give it all to Buffet's stock or Goldman Sucks and hope for the best.
this is the rydex data I get and they are quite the opposite of yours. any idea where this contradiction derives from?
http://www.schaeffersresearch.com/streetools/market_tools/rydex_nu.aspx
2/26/2010 0.556
2/25/2010 0.547
2/24/2010 0.534
2/23/2010 0.535
2/22/2010 0.550
2/19/2010 0.543
2/18/2010 0.524
2/17/2010 0.473
2/16/2010 0.471
2/12/2010 0.457
"If insider expectations continue to remain low, then why should yours remain high?"
1. Because Mr. Abby Joseph Cohen told me the market was going to 1,300.00.
2. Because Mike Santoli from Barron's knows a guy, who knows a guy, who knows a guy, who knows a guy, who knows a guy, who knows a guy who says the market is going up.
So, after a disaster such as Haiti or Chile police are dispatched to eliminate looting and theft.
After a financial disaster when the bankers and wall street crooks are looting and stealing there isn't a cop in sight.
No recovery until there is recovery of stolen goods and all the trillions of dollars outright stolen.
There is no difference, folks, and until these crooks are behind bars there will be nothing but pain and depreciation.
Democracy and sovereignty? What the hell are those concepts when you are anything but rich, anyway.
Karllllll????
http://www.youtube.com/watch?v=kZUPCB9533Y
37 times! Karllllll!!!!!
Today DOW / SP500 are totally ignoring the bullish USD and bearish EURO.
Yikes.
http://www.zerohedge.com/forum/market-outlook-0
Haven't seen much discussion of land. Three hundred million people in the country and they aren't making more land. Of course, things like gold, platinum, palladium are not too plentiful either.
But trading can be OK for those that have the disipline. The Basilisk lizard can run on water because he can move his feet fast enough.
Blackbeard - as such markets have always been a scam but after 1982 it was a legitimised scam !!
it looks like the "smart money" has been neutral/bearish since S&P 900 missing out on a 22% move. Also, "smart money" was extremely bullish in July/Aug 2008 right before the massive market crash. Meanwhile, "dumb money" was much less bullish in 08 and more bullish through the whole rally in 09 and 10. Are you sure you didn't get the "smart" and "dumb" money confused?
"Is it not obvious to you, Solon? Am I not clearly the happiest man alive?"
I started trading right at the bottom in early 2009, so I may be a "dumb investor" to the ZH crowd. Outside of one small trade last month to clear my "free" balance, I did all my trading last February and haven't put in a cent since May. The market has been sort of stagnant from my point of view since summer at least.
I rode Ford up from $2 but most of the other stuff I've been watching has only inched up here and there. What I don't get is how the DOW has managed to hover between about 10,200 and 10,600 for so long. Or why the market and silver (got some during a panic lull just in case) keep going up and down alongside each other.
I'm starting to think that maybe the smartest thing I can do at this point is stay put. We've been on a downward slide as far as jobs go for 20 years, so I don't see anything to support a return to market highs. More layoffs and outsourcing are short term fixes at best and at worst they're poison with very long term consequences.
Interest rates bitches. If anyone thought that fundamentals were the primary driver of this market since the 70's...well joke's on your sucka!
Expectations, what a crooked stick of the masses (a rubber crutch in a polio ward).
As long as government and business are swimming in the same pool I expect to be robbed into servitude of the "corporate government model."
Fuck expectations, anyone with any will get their pockets picked by the common banker (aka thief) until there is no more.
The NYT sunday money section says "Corporate insiders are sending fairly positive signals about the market"
http://www.cnbc.com/id/35619902
Does this contradict your data? Or is it another example of bait and switch wordcraft?
"Dumb money" = pension funs, mutual funds, insurance policy holdings, and - basically - the "assets" owned by people in some "retirement" fund.
Its finally settling in that this has all been an elaborate scam.
The scam started in 1982 - thats when the 401k programs started. Of course things got irrational in early nineties alongwith repeal of Glass-Steagall. Check how markets have done after 1982 and how they did before 1982!!!
Its finally settling in that this has all been an elaborate scam.
Yep. The most effective way to steal money is to make the mark think it's his fault, or his bad "investment" decisions. The trouble is, a capitalist system doesn't work very well without capital, and without actual functioning capital markets, and it seems we currently have neither capital nor functioning capital markets. Does that mean we no longer have capitalism?
'Turn out the lights, the party's over. They say all good things must end...'
or in the eternal words of Al Bundy: 'I've (We've) had too much for too long.'
No. We have corruption. Like a plague.
I expect the "dumb" money wildebeests will do what they always do... Continue to drink from the edge of the crocodile infested waters, because if he's drinking well so am I...
Until they are all eaten...
As for the "smart money"... They will continue to feast on the dumb wildebeest until there are none left to eat cos if he's eating then so am I...
Then the crocodiles will starve...
Predator or prey, it matters little when greed(cough cough, excuse me. Healthy free market competition)overpowers the best interests of the individuals and the species...
But forgive me for what is obviously a ridiculous analogy. Animals don't take more than they need. They do not know of culture or religion...
Wolves will frequently kill two or three sheep and eat the choice cuts rather than killing one and devouring its carcass. If the 'reintroduce the wolf' greenies could see first-hand the carnage created by these savage creatures they'd change their tune.
The Banksters are Vampire Wolves, and their 'God's Work' consists of fleecing the sheeple.